Lawmakers: VA has conflict on vets’ businesses

Mar. 28, 2013 - 08:17AM
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Two key lawmakers are accusing the Veterans Affairs Department of violating the law by having one person head both the office that verifies veteran-owned businesses can receive government contracts and the office that promotes veterans’ entrepreneurship.

VA may not be the only federal agency that has assigned additional and potentially conflicting duties to the person heading the legally required office for small and disadvantaged businesses, but it is the first one to draw pointed complaints.

In a letter being delivered today to VA Secretary Eric Shinseki, the two House subcommittee chairmen said the appointment of Tom Leney as director of VA’s Center for Veterans Enterprise and director of VA’s Office of Small and Disadvantaged Business Utilization violates a requirement enacted earlier this year to prevent shared duties.

The letter is signed by Rep. Richard Hanna, R-N.Y., chairman of the House Small Business Committee’s contracting and workforce panel, and Rep. Michael Coffman, R-Colo., chairman of the House Veterans’ Affairs Committee’s oversight and investigations panel.

The law says the director of an agency’s small and disadvantaged business office may not hold any other “title, position or responsibility.” This requirement has been in law for several years but was strengthened last year after a 2011 report by the Government Accountability Office, the investigative arm of Congress, found many federal agencies had assigned multiple duties to the person who was supposed to oversee contracts for small businesses.

Independence of duties is designed not only to prevent a conflict of interest, but also to ensure someone is giving full attention to reviewing agency contracts to ensure they are not written in a fashion that excludes small businesses, such as those owned by veterans and disabled veterans, from competing for work.

The lawmakers offer no specific recommendation about dividing Leney’s duties, although separating the two positions clearly is their intent. The letter asks Shinseki to explain how VA intends to comply with the law.

Leney appeared March 19 at a joint hearing of the two subcommittees and was asked by Hanna about the apparent violation of law and potential conflict of interest of holding two positions.

“Can you be the advocate for service disabled veterans-owned small business at the same time you’re tasked with verification, with all due respect?” Hanna asked.

“I personally do not have any issue with a conflict of interest because we are helping veterans,” Leney said. “This is real money to real vets … a program that benefits veterans.”

Leney said he has helped 5,400 veteran-owned small businesses become verified to compete for VA contracts.

In their letter to Shinseki, Hanna and Coffman said Leney’s answer “demonstrates a lack of understanding of explicit language of the Small Business Act,” which requires exclusive duties for the contract oversight, and “belies the inherent conflict” between the two roles.